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'Investing' in Knicks vs. Heat: NBA Eastern Conference Finals

Written by: Marilen Cawad05/01/13 - 12:30 PM EDT

Tickers in this article:
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NEW YORK (TheStreet) -- Juan Ruiz, a 30-year-old NBA fan, is betting on a New York Knicks-Miami Heat showdown in the Eastern Conference finals. With less than a month till game one, Ruiz has wagered $1,655 to see the two teams meet at Madison Square Garden.

Believing that he will not have a shot at limited tickets through Ticketmaster when matchups are decided, Ruiz decided to buy a pair of 100-level tickets for the contingent game through reseller StubHub, an eBay company. Excluding fees, each ticket cost him $750.

If the Knicks don't make it to the finals, StubHub will give him a full refund. But if they do, and ticket prices skyrocket closer to game one, Ruiz said he would consider reselling his tickets.

The purchase seems risk-free, unless one believes that ticket prices in the secondary market would drop closer to game day. Highly unlikely, says Brittany Menard, ticket broker and author of The Ticket Broker Guide.

Demand, says Menard, is at its highest after the initial sale of tickets to the general public. If the event is a quick sellout -- which is expected if the Knicks are in the finals -- "fans will be left scrambling for tickets and would be willing to pay more money on the secondary market to secure their seats."

Madison Square Garden has a total capacity of around 19,000 seats for New York Knicks home games, but a representative for MSG would not disclose how many tickets will be made available for the finals. Season subscribers are offered seats before tickets can be sold to the public.

For big games, Menard says teams hold back the majority of tickets for a number of reasons: corporate partnerships, team and building sponsors, promotions, friends and family associated with the team, contests and season-ticket holders. "Some premium seats are never even released to the general public and are held back to be auctioned off on sites like Ticketmaster's TicketExchange," says Menard.

To make a profit in the secondary market, Menard -- who has been buying and selling tickets since 2006 -- explains that the "investor" should buy the tickets before the matchups are decided.

According to ticket search engine TiqIQ, for the NBA Eastern Conference finals, the average ticket price in the secondary market for home game one of the Knicks is currently $1,523; the average ticket price for the first Miami home game is currently $592.